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The Energies sector was in free fall mode while US stock index futures jumped to start the week, all on more “peace in Iran" headlines.
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Meanwhile, the Grains sector reminded me of the Red Wedding scene from Game of Thrones, particularly the oilseed sub-sector.
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Last Friday's Commitments of Traders report showed solid buying across the board in the Grains sector, though not enough to switch. the SRW position to net-long futures.
Morning Summary: I was going to refer to The Bangles song “Manic Monday[i]” for today’s Morning Commentary but realized I do that nearly every week. So, I changed it up a bit with “Walk Like an Egyptian”[ii]. Does that have anything to do with markets to start the week? Not at all. In fact, if ever the label “Manic” fit the commodity complex, it’s today. Let’s go through the usual checklist: The Energies sector is free falling with Brent crude (QAU26) down 9.2%, WTI off 7.8%, distillates (diesel fuel) down 2.4%, and petrol off 4.25%. Given this break, we would expect the Indices sector (US stock index futures) to be higher, which they are. S&P 500 futures are up 1%, DJIA futures are 1.1% in the green, and Nasdaq futures are up 1.6%. We can also guess the headline this morning: “U.S. and Iran pause fighting to give peace talks ‘space’…”. No, I’m not making this insanity up. That’s what the lead headline reads. Meanwhile, gold is up 0.6% (GCQ26) while silver has added 1.3% and Dr. Copper the economic indicator was 0.6% in the green early Monday morning. Out in the Barn, given the explosive rally in stock index futures and last week’s closing rally, I’m expecting both cattle markets to stampede once the opening bell rings.
